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Business, 27.04.2021 15:30 hannahchristine457

Assume a central bank follows a rule that requires it to take steps to keep the price level constant. If the long run price level fell because of a decrease in aggregate demand and a subsequent increase in short run aggregate supply that kept output unchanged, then Question 5 options: a) the central bank would have to decrease the money supply which would decrease output. b) the central bank would have to increase the money supply which would decrease output. c) the central bank would have to increase the money supply which would increase output. d) the central bank would have to decrease the money supply which would increase output.

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Assume a central bank follows a rule that requires it to take steps to keep the price level constant...
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